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If you watch Mike Hoskings interview with Prime Minister Chris Hipkins, the PM clearly "agrees" with Hoskings that NZ's 2023 Quarter 2 Gross Domestic Product growth figure is bigger "than for every country other than Japan" (between 9 minutes 30 seconds and 10 minutes 30 seconds into the interview below). Stats NZ says our Q2 figure (for April to June 2023) was 0.9% higher when compared to the previous quarter.


To the best of my knowledge there are lots of nations in the world with better comparable numbers. Was the PM only referring to the OECD? But he used the words "every country other than Japan" and even if you look at the OECD data base of Q2 Real Quarterly Growth Figures (below) for 2023 there are plenty of countries with higher rates than NZ. We are listed at 0.9%, but Costa Rica is at 1.9%, Greece at 1.3%, Iceland at 2.2%, Japan at 1.2%, Lithuania at 2.4%, Slovenia at 1.4%, Turkey at 3.5%, Croatia at 1.1% (and India at 1.9%).


The PM arguing our economy is a stand-out success on the basis of GDP is outrageous. We are not best on GDP growth compared to "every country other than Japan". And our GDP per capita is contracting since our population - due to immigration - is rising at a faster rate than our economy, so the living standard of the average Kiwi is falling.


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In a debate with National Party Finance Spokeswoman Nic Willis, Finance Minister Grant Robertson tried explaining why previously he opposed cutting GST on fruit & veges but now has reversed himself & supports the policy. He stated that the difference is the introduction of a Grocery Commissioner who will "make sure the benefits are passed on".


However, the pass-through depends on the relative sizes of the elasticities of demand & supply for fruit & veges. If demand is highly elastic compared to supply, then even in a competitive market the GST cut will not be passed on & there's nothing the Commissioner can do about it, since it has nothing to do with monopoly powers & collusion.


We've made the point before on DownToEarth.Kiwi when the PM argued that the Commissioner will ensure the 15% cut in GST is passed on. Now the Finance Minister has made the same claim. The PM didn't tell the truth & now the Finance Minister isn't telling the truth .. which just goes to show one thing - this election campaign has been marked by grossly misleading assertions about the effects of all our parties policies on the economy.


Sources


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